The two countries have decided to give talks another chance after the last one held in Khartoum, Sudan in October collapsed.
On Tuesday, technical teams seeking to end the conflict over Ethiopia’s Grand Renaissance Dam along the river Nile appeared headed for a major breakthrough as the second round of talks progressed in Cairo, Egypt.
Observers, who included officials from the US and the World Bank who joined ministers from the three countries - Ethiopia, Egypt and Sudan - for the two-day meeting, said Ethiopia and Egypt had ceded ground on their divergent demands and were now looking at how to effect the findings of the tripartite technical committee.
Tensions have been mounting in recent years, raising fears of a full military action. Egypt, which is heavily dependent on River Nile to power its economy as nearly 90% of Egypt’s fresh water comes from the Nile and the country’s own mega-dam, the Aswan, is also on the river fear that Ethiopia’s Grand Renaissance Dam will significantly reduce water flowing to Egypt if it’s filled haphazardly.
The Grand Renaissance Dam is located in the northern Benishangul-Gumuz region, 20 miles from the Sudan border, is set to become Africa’s biggest hydroelectric power plant once completed.
It will generate more than 6,000MW of electricity once fully operational. Ethiopia began building the 6,400 megawatt Renaissance Dam in 2011 and hopes to generate electricity from it by the end of next year before its full operational in 2022.
In October, Ethiopia’s Nobel peace prize-winning prime minister, Abiy Ahmed, rejected what he said was war-mongering by Egypt, stating that “no force could stop Ethiopia from building a dam”.
Sudan, through which the Nile also passes expects to buy electricity from the dam, which would also partially mitigate flooding from the River Nile.
Prior to the latest round of talks, the two countries were not seeing eye to eye with Egypt demanding that the dam be filled over a longer time with a uniform volume of water being excised annually.
On the other hand Ethiopia was pushing to have the dam filled up in three years fearing the $4 billion dam would have huge developmental costs if it does not come to full operation sooner.
Ethiopia’s water, irrigation and energy minister Seleshi Bekele said Addis Ababa was now working to have the dam filled over four to seven years.
Mr Bekele said the three countries were targeting to distribute the Nile River water properly through joint action.
"The world is waiting for us to end the crisis," Bekele said.
Egypt requires a guaranteed 40 billion cubic meters of Nile water a year.
"We are facing a real opportunity to achieve tangible progress in the Renaissance Dam negotiations," Egyptian Water Resources Minister Mohamed Abdel-Ati said at a joint press conference before the talks started on Monday.
Sudanese Irrigation Minister Yassir Abbas said that the talks focused on technical issues related to the dam with a view to address concerns of all parties.
“We have had talks and are on the right track,” Mr Abbas said, adding that the countries were also exploring opportunities for broader co-operation between them as well.